OptionsHouse

Options Trading News

March 14, 2013  Thu 3:47 AM CT

BBY: SEE CHART GET CHAIN FIND STRATEGIES
Best Buy has gone on a surprising run this year, and one trader is betting that it has a bit more to go.

optionMONSTER's Heat Seeker system shows that a trader bought 2,500 April 22 calls for $0.73 and sold 5,000 April 24 calls for the bid price of $0.24. This is a new call spread, as the volume was well above the previous open interest of fewer than 500 contracts at each strike.

The call vertical, also known as a ratio spread because one strike saw twice as many contracts trade as the other, cost $0.25 to open. That is the maximum potential loss with BBY anywhere below $22, while the maximum gain would be realized with shares up at $24. Above that level, the faces the obligation to sell shares at that price. (See our Education section)

BBY gained 3.3 percent yesterday to finish at $20.96, its highest close since early July. The electronics retailer was at a 13-year low of $11.20 at the end of 2012 and has not closed above $24 in a year.
Share this article with your friends


Related Stories

BBY

Big investor keeps rolling with Best Buy

August 29, 2016

The electronics retailer has rallied 24 percent in the last three months, and a large trade is extending a bullish position in the name.

OptionsHouse

Premium Services

Education & Strategy

Continue to melt up? Think debit call spreads

The U.S. equities market is continuing to melt up. Even though the labor market is stagnant, the Fed keeps hinting that a short term interest rate hike is coming sometime soon.

View more education articles »